Directors’ independence
Directors’ independence has been a key focus of the Securities Commission Malaysia (“𝗦𝗖”) and Bursa Malaysia Securities Berhad (“𝗕𝘂𝗿𝘀𝗮”) lately as can be seen from the following amendments or proposed amendments: 𝗥𝗲𝘃𝗶𝘀𝗶𝗼𝗻 𝘁𝗼 𝗠𝗮𝗹𝗮𝘆𝘀𝗶𝗮𝗻 𝗖𝗼𝗱𝗲 𝗼𝗳 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 (“𝗠𝗖𝗖𝗚”) The SC issued the revised MCCG on 28 April 2021 which took effect …
Alternate director
Anyone who consents to act as an alternate director should also understand the implication of doing so. Some points to note on alternate director: An alternate director is subject to the same statutory and fiduciary duties as a director when carrying out his/her functions as an alternate. An alternate director …
Factors to consider for appointment of independent director
The following are some factors to consider when selecting candidates to be independent directors of a public listed company in Malaysia • Whether the proposed independent director complies with the requirements within the “independent director” definition in Chapter 1 of the Listing Requirements, read together with PN 13 of the …
CEO, CFO, COO are also “directors”
The definition of a “director” is not limited to a person who is formally appointed as a director. Whether a person is a director depends more on the person’s functions than title. The definition of a “director” under section 2 of the Companies Act 2016 is not exhaustive. It includes …
Who is fit to be a director?
The Companies Commission of Malaysia has brought charges against directors of companies in separate cases for acting as directors while being undischarged bankrupts.* The legislature does not prescribe the qualities and experience a person must possess before he is fit for appointment. However, the legislature does prescribe the categories of …
Duty of nominee director to act in the best interest of company prevails
A director may be appointed to represent the interests of a person or a particular group such as employees, creditors or debenture holders. When a shareholder invests in a company, the shareholder and the company may agree that the shareholder has the right to appoint a director to represent the …
Non-executive director’s appointment letter
The ICSA published a sample non-executive director’s appointment letter (link in the comment section). The sample letter aims to provide an initial checklist of the elements a company intends to cover in its appointment letter and is not intended to be a prescriptive template. Although the sample letter is drafted …
What to consider for appointment of independent director of PLC
The following are some points to consider for the appointment of an independent director of a public listed company (“PLC”): 1. Whether a candidate for the position of independent director is able to exercise independent judgment and act in the best interest of the PLC. 2. Whether the background and …
The Guidelines on Conduct of Directors of Listed Corporations and Their Subsidiaries
The Securities Commission of Malaysia (“SC“) has issued The Guidelines on Conduct of Directors of Listed Corporations and Their Subsidiaries pursuant to the the Securities Commission Act 1993. The guidelines is a restatement of the standards that are expected of directors as fiduciaries. The effect of the guidelines is that …
Can an independent director of a public listed company sit on the board of a subsidiary?
In the context of a Malaysian public listed company (“PLC”), an “independent director” means a director who is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the PLC, …